Extreme measures not needed: Malaysia
Malaysia’s central bank said Thursday there is no need for “extreme measures” such as pegging the currency or capital controls to halt a slide in the ringgit.
The Malaysian currency has slumped by 20 percent since Sep- tember last year and sank below four to the U.S. dollar on Wednesday following mainland China’s surprise devaluation of the yuan. On Thursday, a U.S. dollar was buying 4.02 ringgit.
Bank Negara Malaysia governor Zeti Akhtar Aziz said the volatility in the ringgit was due to external challenges as well as “domestic issues that have generated uncertainties,” in reference to controversy over debt laden state investment fund 1MDB.
She said a flexible exchange rate regime is crucial and that the financial system is strong enough to absorb the shock.